U.S. GDP Contracts 6.2%, Recovery Outlook Has Mixed Emotions

U.S. gross domestic product (GDP) contracted at a 6.2% annual pace in the fourth quarter of 2008, the most since 1982, the Commerce Department said Friday.

The government last month estimated the drop in fourth-quarter GDP at 3.8%.  Friday’s 2.4 percentage-point revision was almost five times as large as the average adjustment.

“Most of the major components contributed to the much larger decrease in real GDP in the fourth quarter than in the third,” the Commerce Department said. “The largest contributors were a downturn in exports and a much larger decrease in equipment and software.”

Global trade, which contributed a 0.1%…

Quick Tips in Profiting from the Nation With the Smallest Stimulus Package

Commentators are tripping over one another to declare this country or that country’s stimulus package as a primary reason to pour money into its stock market. Yet if you look at the highly damaging long-term effects of such loose monetary and fiscal policies, an investor can come to only one conclusion: You should invest in the country with the smallest stimulus package.

Stimulus packages are all the rage right now. President-elect Barack Obama has promised an $800 billion package for the United States, which equates to nearly 7% of U.S. gross domestic product (GDP). And there are plenty of others:

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For the U.S. Economy in the New Year, the Pain Will Precede the Promise

If there’s a proverb that captures the outlook for the U.S. economy in the New Year, it’s the one that says: “It’s always darkest before the dawn.”

Regardless of any formal announcement of whether or not the United States drops into an actual recession, the ongoing credit crisis guarantees a contraction of the American economy by virtually every measure we know. That period of darkness will be marked by a dramatic slowdown in economic activity, as well as by rising unemployment, additional declines in U.S. stock prices, and constant volatility. It could last as long as 12-18 months.

But when the dawn…

Today Was Brought to You By the Letter V and the Number 0.3

And, of course, by viewers like you.

It has been made abundantly clear this past week that many of us would much rather be watching Sesame Street than Wall Street – although both are full of valuable life lessons. In fact, had more of our financial leaders watched Sesame Street, we might have less greed, more sharing, and more honesty and integrity throughout the marketplace.

Perhaps we wouldn’t even be in this mess. However, it is evident that there are far more Oscar the Grouches than Big Birds hanging around.

So, “V” might be for vendetta, but as of late has…

Federal Reserve Holds Rates Steady at 2.00%, Says “Downside Risks” and Inflation Remain Concerns

Federal Reserve policymakers yesterday (Tuesday) kept the nation’s benchmark interest rate at 2.00% for the second consecutive meeting, although inflation accelerated and the U.S. economy only advanced slowly.

“Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the committee,” the policymaking Federal Open Market Committee (FOMC) said in a statement.

After a slight contraction in the fourth quarter of 2007, U.S. gross domestic product (GDP) has expanded at a moderate pace, enabling the U.S. economy to dodge an actual recession. GDP increased a 1.9% annual rate in the second quarter after edging up 0.9%…